Hip Manufacturing produces denim clothing. This year it produced 3,380 denim jackets at a cost of $101,400. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets.

1. Jackets can be sold as scrap to a secondhand clothing shop for $20,280.
2. Jackets can be disassembled at a cost of $6,760 and sold to a recycler for $40,560.
3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $114,920, and the jackets can then be sold for $152,100.

Required:

(1) Compute the income for each alternative.

(2) Which alternative should be chosen?